Consumer Price Index, Pittsburgh – Second Half 2010 (PDF)

The Consumer Price Index for All Urban Consumers (CPI-U) in the Pittsburgh area rose 1.2 percent from the second half of 2009 to the second half of 2010, the U.S. Bureau of Labor Statistics reported today. Sheila Watkins, the Bureau’s regional commissioner, attributed the recent advance to increases in the indexes for all items less food and energy (0.6 percent), food (2.7 percent) and energy (3.6 percent). The 12-month advance in the all items less food and energy index reflected higher prices for owners’ equivalent rent of residences, while the increase in the energy index was dominated by higher prices for gasoline. (See chart 1 and table 1.)

Chart 1. 12-month percent change in CPI for All Urban Consumers (CPI-U), Pittsburgh, second half 2007 to second half 2010 (not seasonally adjusted)

Food

Food prices rose 2.7 percent since the second half of 2009. Both components of the food index, food at home and food away from home, recorded over-the-year increases, up 3.5 and 2.7 percent, respectively.

Energy

The energy index rose 3.6 percent from the second half of 2009 to the second half of 2010. The recent advance in energy prices was dominated by a rise in gasoline prices, up 7.0 percent over the last 12 months. Partially offsetting the overall advance were lower prices for utility (piped) gas service and electricity. Utility gas service prices posted their fourth straight over-the-year decrease, down 36.5 percent since the second half of 2008 and 3.2 percent since the second half of 2009. Electricity prices also fell over the last 12 months, down 0.5 percent—their first over-the-year decline since the second half of 2006.

All items less food and energy

The index for all items less food and energy rose 0.6 percent from a year ago. Within this grouping, price increases were led by owners’ equivalent rent of residences (1.3 percent) and medical care (4.9 percent). Higher prices for education and communication (2.3 percent) also contributed to the 12-month increase in the all items less food and energy index. Moderating these advances were lower prices for various components including recreation and household furnishings and operations, which fell 4.5 and 3.4 percent, respectively.

Technical Note

The Consumer Price Index (CPI) is a measure of the average change in prices over time in a fixed market basket of goods and services. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) a CPI for All Urban Consumers (CPI-U) which covers approximately 87 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 32 percent of the total population. The CPI-U includes, in addition to wage earners and clerical workers, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and the other goods and services that people buy for day-to-day living. Each month, prices are collected in 87 urban areas across the country from about 4,000 housing units and approximately 25,000 retail establishments—department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments. All taxes directly associated with the purchase and use of items are included in the index.

The index measures price changes from a designated reference date (1982-84) that equals 100.0. An increase of 16.5 percent, for example, is shown as 116.5. This change can also be expressed in dollars as follows: the price of a base period "market basket" of goods and services in the CPI has risen from $10 in 1982-84 to $11.65. For further details see the CPI home page on the Internet at www.bls.gov/cpi and the BLS Handbook of Methods, Chapter 17, The Consumer Price Index, available on the Internet at www.bls.gov/opub/hom/homch17_a.htm.

In calculating the index, price changes for the various items in each location are averaged together with weights that represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. Because the sample size of a local area is smaller, the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index, although their long-term trends are quite similar. NOTE: Area indexes do not measure differences in the level of prices between cities; they only measure the average change in prices for each area since the base period.

The Pittsburgh, Pa., Metropolitan Statistical Area (MSA) includes Allegheny, Armstrong, Beaver, Butler, Fayette, Washington, and Westmoreland Counties.

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